Why CBS (CBS) Stock Is Up Today

NEW YORK (TheStreet) -- CBS (CBS) was gaining 5.3% to $61.95 Wednesday following a Super Court ruling against Aereo.

In a 6-3 decision the court ruled in favor of broadcasters, saying that Aereo, which streams over-the-air TV to tablets, phones, and computers, violates the Copyright Act. The ruling overturned a previous ruling that said Aereo's method of delivering content was legal under the act.

Aereo argued it was providing a technology that its users rented to watch TV, though the court ruled that Aereo "is not simply an equipment provider."

Other broadcasters including Comcast (CMCSA), Disney (DIS), and 20th Century Fox (FOXA) are gaining following the ruling.

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TheStreet Ratings team rates CBS CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CBS CORP (CBS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CBS CORP has improved earnings per share by 6.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CBS CORP increased its bottom line by earning $3.01 versus $2.48 in the prior year. This year, the market expects an improvement in earnings ($3.49 versus $3.01).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 5.6% when compared to the same quarter one year prior, going from $443.00 million to $468.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Media industry and the overall market, CBS CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • You can view the full analysis from the report here: CBS Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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